Impact of Car Specifications, Prices, and Incentives for Electric Vehicles in Norway: Choices of Heterogeneous Consumers

Electric vehicles (EVs), specifically Battery EVs (BEVs), can offer significant energy andemission savings over internal combustion engine based vehicles. Norway has a long history ofresearch and government incentives for BEVs. The BEV market and ample data sets in Norway allow usto fully examine consumers\u27 BEV choices influenced by car specifications, prices and governmentincentives (public bus lanes access, toll waivers and charging stations). To capture the choices ofheterogeneous personal consumers and business buyers, we use Random-Coefficient Discrete ChoiceModel (referred to BLP model). Our study is instantiated on the entire BEV sales data in Norway from2011 to 2013, as well as demographics information at municipality level. The results suggestsignificant positive effects of BEV technology improvement, toll waivers and charging station densityon BEV sales for both personal consumers and business buyers, except that bus lanes access may havea negative impact for personal consumers, possibly due to consumers\u27 concern regarding bus lanecongestion. The effects on business buyers are generally less pronounced than on personal consumers.In addition, we find significant heterogeneity in consumer preferences over BEV price and carspecifications. In particular, a 9,500 NOK increases in consumer income can lead to approximately 10%decrease in price sensitivity on average. In other words, individual consumers with higher incomewould be less price-sensitive than those with lower income. Significant heterogeneity in incentivepolicy impacts on different brands are also found, especially for Renault, Ford, Nissan (all three being agood compromise of prices and ranges) and Tesla (with an exceptionally long range